Closed in NY at $1.3050 and drifted higher through the Asian session, extending the recovery off NY lows of $1.30165 to retest NY highs at $1.3080 (61.8% $1.3120/1.3016) before early Europe extended the move on to $1.3095 (76.4%). Flows through Asia were described as very light, markets gearing down ahead of the elongated weekend Christmas holidays, which will close most major centres into next week (Japan closed today). WSJ report that the Fed is considering indicating that interest rates are likely to stay close to zero until 2014 or beyond (from current communication of ‘until mid-2013), as well as ECB Bini Smaghi suggesting in an interview with the FT that QE should be an option for the ECB if deflation risks emerge both aided the move up in EUR/USD, though AUD was seen as the lead into risk through the overnight session. Offers seen placed between $1.3095/00, a break to open a move on toward $1.3120. Further offers seen to $1.3130 ($1.3129 61.8% $1.3199/1.3016), a break to open a move on toward $1.3150/60. Support seen at $1.3050/45 ($1.3047 Asia low), more at $1.3035.
EasyForexNews Research Team